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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (41302)	11/13/2003 7:13:51 PM
From: Challo Jeregy	Respond to of 74559

thank you Jay. I was hoping that you would know . . . . I've heard it from several sources but no "official" links - I, too, played PCU for an incredible run and sold it last Friday. I see it made a new high yesterday.

To: TobagoJack who wrote (41302)	11/13/2003 8:34:13 PM
From: ajtj99	Read Replies (1) \| Respond to of 74559

Challo and Jay, the change January 1st is a change in the way exporters are rebated the 17% VAT. Currently, the exporter can get a rebate of all or a portion of the 17% VAT, depending on the item being exported. For example, textiles exports qualify for the entire 17% VAT to be rebated, but that will change to 13% after Jan. 1st. Automotive related items also will have the same change. Tools and Machinery change from 15% rebate to 13% rebate. The average change is 3%. The effect will be price increases across the board for items purchased from China. In the ideal case, each party in the transaction will share the burden of the increase (example: factory 1%, exporter 1%, and customer 1%). Most situations are going to be less than ideal, however. I hope this answers your question. The net effect will be an increase in the price of Chinese products without a change in the pegged currency exchange. The government will also collect more money in revenue as a result of the reduced rebate.